SD Attorney Says Lawsuit Brings Up Transparency, Compliance Issues for Concierge Medicine
A recent lawsuit by the Los Angeles-based SignatureMD Inc., a concierge membership program provider that helps physicians convert their practice to a concierge (or direct pay) practice model, brings up some of the issues physicians face when transitioning from a traditional practice.
It may also be a sign of increased segmentation of the market in this space as well as the need for a federal safe harbor for private medicine to clarify compliance requirements and allow for these practices to become more transparent.
SignatureMD Inc. is suing a much larger competitor, MDVIP, based in Boca Raton, Fla., over what it deems anti-competitive and monopolistic behavior in violation of several federal and state laws. Matt Jacobson, CEO of SignatureMD, told PNN “this legal action is not just about protecting the rights of SignatureMD, it is about protecting the rights of physicians and patients alike.”
James Eischen, San Diego attorney with Higgs Fletcher & Mack, an expert in healthcare regulatory and compliance issues, and a frequent speaker on private medicine reimbursement and data management compliance, told PNN that the lawsuit brings up issues of compliance requirements and transparency.
“U.S. healthcare reimbursement is necessarily reforming toward subscription-based primary care,” Eischen said. Until a plain regulatory safe harbor protects subscription-based private healthcare, however, there may be “ongoing tensions between consolidation driven by a desire for institutional protection and efficiencies versus anti-competitive issues arising from consolidations.”
He noted that “improved regulatory clarity for private medicine compliance would relieve that tension by diminishing the perceived need for physicians to align with larger business units to engage in private medicine. That would in turn protect the ability of individual physicians to convert medical practices into compliant private models without utilizing national models.”
Signature MD alleges that MDVIP, which has market share ranging from 66% to 100% in some key markets, entered into agreements with physicians that contain covenants so restrictive that little or no competition is possible in MDVIP-dominated markets.
According to the statement issued by the company, SignatureMD is the third-largest company in the industry, and the company “has found it difficult, and at times even impossible, to contract with physicians in key geographic markets because MDVIP contracted with the vast majority of eligible physicians in those markets and bound those physicians to evergreen contracts which forbid the physicians from practicing concierge-style medicine independently or as an affiliate of a competitor.”
Roberta Greenspan, president of Specialdocs Consultants Inc., told PNN she believes fair competition is healthy in every marketplace and that prospective concierge physicians should have options when choosing which consulting company to utilize for their practice transition.
“I can’t really speak to the merit of this lawsuit,” Greenspan said. “What I can say is that although both SignatureMD and MDVIP are competitors of Specialdocs, our transitioning approach is quite different. We brand each physician’s practice rather than branding ourselves, and we provide an alternative for physicians who desire to remain independent; our contract length is relatively short compared to competitors, and the terms are not restrictive. The result is that for Specialdocs, at least, we’ve been operating very successfully in this space for over 12 years and have continued to experience significant growth across the country.”
James J. Eischen Jr., Physicians News Network, SD Attorney Says Lawsuit Brings Up Transparency, Compliance Issues for Concierge Medicine, (Aug. 5, 2014), http://www.physiciansnewsnetwork.com/ximed/article_0c7ba7ae-1991-11e4-a1d8-0017a43b2370.html.